We are celebrating this week as Goldman Sachs 10,000 Small Businesses has reached an exciting milestone- 5,000 small business owners. When we began the design of the program, we started by defining exactly what entrepreneurs needed to be able to do to grow their business. That emphasis on growth was an intentional differentiator from start-up focused programs. While we were reasonably confident that from our shared practical and academic experiences we knew what needed to be on the list, we also tapped a group of thinkers and leaders in this space to help us nail it. And after five years, that list and the resulting curriculum is working. This month we released our second progress report, Stimulating Small Business Growth, which shows that the small business community continues to be an engine for growth across the country and are outperforming U.S. small businesses overall in revenue growth and job creation.
As the report shares, most participants who go through the program grow their business revenues, 67% of them at six months and 76% by 18 months. The results for job growth are equally impressive, with 46% reporting new jobs at six months, rising to 57% by 18 months. While exact national comparisons are difficult, the National Small Business Association 2014 Year-End Economic Report shares that 45% of U.S. businesses reported increased revenues and 22% reported creating new jobs.
Our mission at Babson is to continue thinking about ways we can share our learnings on what it takes for an entrepreneur to grow and thrive. . And so, I'm now working on my ABCs of entrepreneurship education - and today releasing, literally, my A, B, and C.
A is for Aspirations
In thinking about the people behind these growth numbers, there is often a driving motivation as to why people start businesses. If looking only at those motivations that pull people into entrepreneurship, they generally include: I want to be independent, I want to create something of my own, and, usually third or fourth on the list, I want to make some money (create wealth). They also usually have a sense of how they want to grow their business, but with the very explicit exception of the tiny sliver of businesses who start out venture capital bound, far fewer think about the actual business they want to create. Do I want to (aspire) to hire anyone? Do I want to create an empire? And, of course, everything in between. Obviously this is looking at aspirations from just one measure, however, it is a start towards thinking about what I want my business to be when it grows up. For those in 10,000 Small Businesses¸ it is explored through their growth plan and a consideration of an exit strategy - even for those that never want to exit. (And you know who you are).
B is for Behaviors
Through 10,000 Small Businesses we know that small business owners often are not spending their time doing the things they want to do, or think they should be doing, to grow their businesses. At the time they enter the program they are spending an average of 43 percent of their time on day to day operations and 12 percent on strategy, while wishing they were spending about 25 percent on each of those things, leaving the other half of their time for activities such as sales, building relationships, and working on finance and accounting. In order to grow a business, most owners must change their behaviors. That might mean learning how to better understand and use your financials in making strategic decisions or testing the best ways to become more of a business collaborator. Our new report does show that, for the most part, the alumni who report working with others from the program are also those who more often report that they are growing.
C is for Confidence
Nothing is going to work unless you believe it's going to work. The need is to figure out which you need to build your confidence and create a self-development plan for how you are going increase your confidence levels around those tasks necessary for business growth. You can actually think about your confidence levels as a resource. Do you have enough? Or sometimes too much? And specifically, do your confidence resources match your business growth opportunities? If not, what are you going to do about it? Many business owners report being less confident than they would like to be in dealing with their financial statements, or making pitches, or building a vision with their team. Their action plan for confidence building can then be targeted directly towards learning about and practicing those related skills.
ABCs. Overall, each part needs to fit with the other. Confidence supports behviors that lead to successfully achieving aspirations. . As Chris Vernon of Progressive Reporting Agency and a recent graduate of 10KSB in Salt Lake City shared, "My aspirations have changed. I see bigger and I see I can make it happen. " ABC.